IBJNews

City-County councilor, two others indicted in scheme to defraud

Back to TopCommentsE-mailPrintBookmark and Share

A City-County Council member and two associates persuaded an Indiana physician to invest $1.7 million in their foundation and an ethanol-production business they said would fund it, but instead spent the money on personal luxuries, according to a federal indictment filed late Tuesday.

The indictment charges Paul C. Bateman Jr., a council Democrat who did not seek re-election this fall, Michael L. Russell and Manuel Gonzalez with multiple counts of money laundering and wire fraud in connection with an alleged scheme to defraud the physician in 2007.

Bateman declined to comment on the charges Wednesday morning but provided the name of his attorney, who could not immediately be reached.

According to court documents, Russell—also known as Rev. Michael L. Russell—co-founded The Russell Foundation in 2003 with the mission to “enhance society through compassionate concerns for the spiritual, moral and ethical fibers of the community.” He served as CEO, while Bateman served as chief administrative officer and chief corporate officer, and Gonzalez held various positions.

Russell proposed that the foundation fund itself through the production and distribution of ethanol, according to the indictment. In January 2007, he approached the physician, identified in court documents as “A.S.,” during a medical appointment about making an investment in an entity later established as Indiana Ethanol Capital Investments LLC. Russell, Bateman and Gonzalez attended several meetings with the doctor at a Denny's restaurant to further sell him on the investment.

Russell told the physician that the ethanol operation could reap an $18.5 million return on a $600,000 investment, and that he would be the last of 12 people to invest in it. In fact, the doctor was the only investor.

Between February 2007 and April 2007, according to court documents, Bateman picked up five checks for the ethanol investment totaling $702,000, most of which was deposited into Bateman’s personal account. The remainder was put into The Russell Foundation account, and later was transferred between that account and Bateman’s personal account.

All but $30,000 of the money was spent on items such as custom clothing, home furnishings, entertainment and “elaborate security details” that included members of the Indianapolis Metropolitan Police Department, the indictment says. All but $44,000 of the money was spent by May 2007.

In that same month, Russell also solicited the doctor to purchase a corporate cash bond of $1 million issued by The Russell Foundation. He pledged a return of $600,000. Russell also falsely told him that the foundation already had raised $3 million.

The indictment said Russell, Bateman and Gonzalez provided the physician with a document that appeared to be a corporate cash bond with a maturity of $1.6 million and a maturity date of Dec. 31, 2007. The $1 million, transferred in two payments from the doctor’s Stifel Nicolaus account, was to be disbursed “in accordance with development of the Russell Foundation, Inc., Humanitarian Projects.”

Instead it was spent for personal gain, including Bateman’s $22,187 income-tax payment; luxury vehicles such as a Cadillac Escalade and Jeep; $25,000 in custom-made clothing; and $25,000 for a rent payment on a residence Russell used.

The men also persuaded the physician to extend the date of the promised return from December 2007 to March 2008.

In both cases, federal prosecutors allege the men used Bateman’s position as a councilor to lend credibility to The Russell Foundation.

Russell, Bateman and Gonzalez face a combined 43 counts, including 18 for Bateman. A spokesman for U.S. Attorney Joe Hogsett said all three will be summoned into court for their initial appearance in about a week.

ADVERTISEMENT

  • .
    Yes, the truth will come out, whether in this life or the next. If they are guilty and happen to skip out on mans justice; they will still face Gods justice.
  • sorry
    Rha, nope, you are wrong. ONE of the other men has been addicted to money from birth. He would have new shirts delivered to his home in boxes of 190 each week. Every morning he would open one of the expensive shirts, put it on, go to work, then at the end of the day - he would throw that shirt in the trash and start all over the next morning. While his kids ate macoroni and cheese and hot dogs for supper, and he dined in fine restaurants.
  • Wait and See
    The truth will come out regarding Mike Russell and how he not only dupped the doctor but Paul Bateman and the other gentleman. Give it time it will all be revealed. Check Batemans track record. Civil service from Chrysler days to Healing Streams and his program for prison recidivism. They followed Bateman for weeks. He went to church, taking care of his ill wife, and the community center.
    • walking it back?
      You knew what you were saying, bucko. Peace out.
    • Racist
      Franklin,
      Mr. Corzine, former head of MF Global, should go to jail. He is an avid supporter of Obama. According to your way of thinking, my charge that Corzine should be jailed for losing 1.2 billion of other people money is a racist comment. Making the charge of racism when there is none trivializes this cancer in our society. Shame on you and others who toss that label out whenever reality doesn't appeal you. In the words of Supreme Court Justice Clarence Thomas, "Get over it!"
    • Another day at the office
      Another Obama supporter going to jail.

      Post a comment to this story

      COMMENTS POLICY
      We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
       
      You are legally responsible for what you post and your anonymity is not guaranteed.
       
      Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
       
      No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
       
      We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
       

      Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

      Sponsored by
      ADVERTISEMENT

      facebook - twitter on Facebook & Twitter

      Follow on TwitterFollow IBJ on Facebook:
      Follow on TwitterFollow IBJ's Tweets on these topics:
       
      Subscribe to IBJ
      1. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...

      2. 85 feet for an ambitious project? I could shoot ej*culate farther than that.

      3. I tried, can't take it anymore. Untill Katz is replaced I can't listen anymore.

      4. Perhaps, but they've had a very active program to reduce rainwater/sump pump inflows for a number of years. But you are correct that controlling these peak flows will require spending more money - surge tanks, lines or removing storm water inflow at the source.

      5. All sewage goes to the Carmel treatment plant on the White River at 96th St. Rainfall should not affect sewage flows, but somehow it does - and the increased rate is more than the plant can handle a few times each year. One big source is typically homeowners who have their sump pumps connect into the sanitary sewer line rather than to the storm sewer line or yard. So we (Carmel and Clay Twp) need someway to hold the excess flow for a few days until the plant can process this material. Carmel wants the surge tank located at the treatment plant but than means an expensive underground line has to be installed through residential areas while CTRWD wants the surge tank located further 'upstream' from the treatment plant which costs less. Either solution works from an environmental control perspective. The less expensive solution means some people would likely have an unsightly tank near them. Carmel wants the more expensive solution - surprise!

      ADVERTISEMENT